Wayne O'Leary

Obama Unchained

According to family tradition, my paternal grandfather, who migrated to this country from Ireland at the turn of the 20th century, did two things immediately upon his arrival. First, he married my grandmother, and second, he joined the Democratic Party.

The political choice was a natural one for an Irishman who came of age in the wake of Parnell and Home Rule. The Republicans, as the party of the American rich and wellborn, were a reminder of the Anglo-Irish landed aristocracy of the old country; they were the ruling establishment with all that implied, whereas their more unruly, less deferential Democratic opponents were the party of the people. So, as a consequence of granddad’s decision, our family became hereditary Democrats, an identification that has lasted three generations.

Regrettably, it’s an identification that of late years has become more habitual than heartfelt as the political parties have drawn inexorably closer together on the economic issues that truly matter, blurring the differences between them and prompting what’s called an agonizing reappraisal. This confluence of the parties started in a small way during the presidency of Jimmy Carter, when Democrats, suddenly sensitive to corporate concerns, began chipping away at the public protections of the New Deal, first by deregulating the trucking and airline industries, paving the way (in the latter case) for the monopoly situation air travelers find themselves in today.

Carter’s baby steps were followed in a bigger way by the neoliberal Clinton administration, which surrendered fully to marketplace values, demonized “big-government” liberalism, and persuaded Democrats to follow a path of third-way centrism. Clinton’s rightward reforms included abandoning the federal responsibility for welfare, which increased poverty in America; signing NAFTA, which kicked off the subsequent outsourcing wave; and deregulating the telecommunications and banking sectors, which led to more monopoly and, ultimately, to the financial crash of 2008 and the Great Recession. George W. Bush and the GOP did their part, of course, pushing through disastrous tax cuts along with further economic deregulation, but the initial impetus came from “New” Democrats who were consciously forsaking the Roosevelt legacy.

The third post-liberal Democratic president, Barack Obama, has continued the slow drift away from the social-democratic structure erected by the New Deal and the Great Society. His distinctive achievement, the Affordable Care Act, fails to achieve universal healthcare, but it does enshrine profit-centered medicine; Obamacare, so-called, is not a comprehensive, government-run program like Social Security or Medicare, but simply a mandate that citizens purchase private health insurance. And now the president, backing off earlier campaign pledges not to reduce Social Security benefits, has proposed exactly that in the form of a revised annual COLA (cost of living adjustment) called “chained CPI.”

For decades, nothing was more immutable than the parties’ differing stances on Social Security. Republicans only grudgingly accepted Roosevelt’s signature social-insurance program, staying constantly on the lookout for opportunities to roll it back, while Democrats remained its fierce defenders against the forces of the Right bent on undermining this presumed opening wedge of socialism in America.

Republicans had resisted Social Security’s creation from the very start in 1935, but didn’t have the votes to stop it. In 1964, their ill-fated presidential nominee Barry Goldwater proposed to make it voluntary. In 1981, the Reagan administration attempted (unsuccessfully) to slash benefit levels and managed, in 1983, to enact an increase in the eligibility age (part of the famous Reagan-O’Neill deal to “save” the program). Finally, in 2005, the Bush administration tried to privatize the system by substituting personal retirement accounts.

Throughout, Democrats remained generally steadfast in opposing fundamental structural or benefit changes to liberalism’s crown jewel. This has abruptly ended with the release of the 2014 Obama budget, which recommends the first permanent benefit cut to Social Security put forth by a Democratic president.

As outlined, the Obama proposal would shift the manner of calculating COLAs from the currently used CPI (Consumer Price Index) formula to one that makes false or highly questionable assumptions about the potential buying habits of seniors — that they can easily substitute cheaper foods for those they’re presently consuming, for example, or don’t have as many healthcare expenses as they actually do. This so-called chained CPI — Sen. Jeff Merkley (D-Ore.) accurately terms it “an accounting trick” to limit benefits — artificially lowers the projected impact of inflation on the consumption patterns of older Americans and renders them economically vulnerable, especially if on small fixed incomes. In dollar figures, it gradually reduces Social Security payments by $112 billion over 10 years, costing average beneficiaries, two-thirds of whom rely on their earned benefit for over half their income, 3% annually (or over $30 per month) by 2023.

So why the administration eagerness to retreat further from liberal socioeconomic values and apply targeted austerity measures to a portion of the population with particularly limited financial wherewithal? It’s not because of the deficit; Social Security is self-funded and didn’t cause the deficit — though deficit hawks don’t want that to become common knowledge. Besides, the money we’re talking about here, while important to someone totally dependent for survival on their monthly benefit (as are one out of four recipients), would hardly dent the budgetary shortfall. It’s also not because the program is “going broke;” it isn’t in the short run, and it can be shored up permanently just by lifting the arbitrary $113,700 individual cap on annual payroll taxes.

The planned benefit cut is proceeding from the worst of all possible motives: Chained CPI has been made a negotiating tool to further the president’s cherished budgetary Grand Bargain with the GOP. Republicans (who hate entitlements) want it, so it’s being cynically held out as a sacrificial offering. Those who didn’t cause America’s fiscal predicament — it was brought about by wars, tax cuts, and recession — are being told they must help pay the tab through “shared sacrifice;” this is a perverted application of bipartisanship, if not political malpractice.

What we may well be seeing here is the real Barack Obama, freed by his final election to move not left, but right — the corporate Democrat-cum-deficit hawk no longer constrained by his troublesome liberal base. If so, he’s setting a terrible precedent for “reforming” entitlements that opportunistic future presidents, conservative Republicans and centrist Democrats alike, will carry to its logical conclusion.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He is the author of two prizewinning books.